"H 


Indebtedness  of  Pacific  Railroads. 


SPEECH 


HON.  WILLIAM  M.  STEWART 

OF  NEVADA, 

IN  THE  SENATE  OF  THE  UNITED  STATES, 

Saturday,  February  9,  1889, 


On  the  bill  (S.  3401)  to  amend  an  act  entitled  “ An  act  to  aid  in  the  construction 
of  a railroad  and  telegraph  line  from  the  Missouri  River  to  the  Pacific  Ocean, 
and  to  secure  to  the  Government  the  use  of  the  same  for  postal,  military,  and 
other  purposes,”  approved  July  1,  1862  ; also  to  amend  an  act  approved  July 
2,  1864,  and  also  an  act  approved  May  7,  1878,  both  in  amendment  of  said 
first-mentioned  act ; and  to  provide  for  a settlement  of  claims  growing  out  of 
the  issue  of  bonds  to  aid  in  the  construction  of  certain  of  said  railroads,  and 
to  secure  to  the  United  States  the  payment  of  ail  indebtedness  of  certain  of  the 
companies  therein  mentioned. 

Mr.  STEWART.  I give  notice  that  when  the  pending  motion  is  disposed  of  I 
shall  offer  what  I send  to  the  desk  to  be  read. 

The  PRESIDENT  pro  tempore.  It  will  be  read  for  information. 

The  Secretary  read  as  follows  : 

Resolved . That  Senate  bill  3401,  providing  for  funding  the  indebtedness  of  the 
Union  Pacific  Railroad  Company,  be,  and  it  is  hereby,  recommitted  to  the 
Select  Committee  on  Pacific  Railroads,  with  instructions  to  report  a bill  which 
shall  provide  for  the  payment  of  the  indebtedness  to  the  United  States  of  the 
several  Pacific  railroads  for  the  construction  of  which  bonds  have  been  issued, 
by  requiring  sums  of  money  equal  to  the  indebtedness  to  the  United  States  of 
the  Union  Pacific  Railroad  Company  and  its  branches,  and  the  Central  Pacific 
Railroad  Company,  as  the  successor  of  the  Central  Pacific  Railroad  Company  of 
California  and  the  Western  Pacific  Railroad  Company,  to  be  expended  by  said 
railroad  companies,  respectively,  in  the  construction  of  such  improvements  on 
the  main  lines  of  said  railroads,  including  double  tracks  and  tunnels  to  avoid 
high  grades,  and  such  new  unincumbered  branch  railroads  as  Congress  may  ap- 
• prove,  and  in  the  construction  of  such  hydraulic  works  for  the  purpose  of  irri- 
gation as  Congress  may  authorize,  with  such  limitations  upon  freights  and  fares 
to  be  charged  by  said  railroad  companies  on  the  roads  so  improved  and  con- 
structed as  will  insure  cheap  transportation. 

Mr.  STEWART  said  : 

Mr.  President  : The  subject  of  the  Pacific  railroads  has  been  so  much  discussed 
that  I hardly  feel  authorized  in  occupying  any  considerable  time  ; but  inasmuch 
as  all  the  propositions  that  have  been  made  since  the  roads  were  constructed  have 
had  a tendency  to  impose  additional  burdens  upon  the  people  of  my  State  and 


4 


upon  the  people  inhabiting  the  adjoining  States  and  Territories,  I think  it  well  to 
examine  briefly 

THE  ORIGIN  OF  THESE  ROADS 

and  their  objects,  for  the  purpose  of  showing  the  very  unequal  burdens  that  must 
be  borne  by  the  people  living  along  the  line  of  these  roads  if  any  of  these  bills 
pass  as  proposed.  In  other  words,  if  the  debt  is  exacted  from  these  roads  it  must 
be  collected  from  the  local  traffic  along  their  lines. 

There  are  several  other  continental  roads  that  are  completed  so  that  none  of  the 
subsidized  roads  can  make  money,  to  pay  this  debt  or  to  pay  their  other  debts  by 
through  business.  That  will  be  reduced  to  the  minimum  by  competition  neces- 
sarily, and  consequently  the  money  has  to  be  paid  by  local  traffic.  Is  that  just? 
Is  it  just  under  all  the  circumstances  to  burden  those  localities  in  the  way  pro- 
posed ? 

If  my  proposition  could  be  carried  out  and  this  indebtness  used  in  the  construc- 
tion of  branch  roads  and  in  improving  the  main  lines,  and  where  there  is  no  busi- 
ness now  to  create  business  by  appropriating  a portion  of  the  money  for  hydraulic 
works  for  irrigation,  so  that  the  people  can  occupy  the  lands,  great  good  would 
be  accomplished,  not  only  to  the  people  there,  but  to  the  whole  United  States. 

THE  CENTRAL  PACIFIC  RAILROAD 

has  now  an  enormous  debt,  the  first  mortgage  bonds  on  150  miles  of  it  amount- 
ing to  $48,000  a mile ; the  balance  of  it  through  my  State  to  $32,000  a mile. 
This  mortgage  was  authorized  by  Congress  and  is  prior  to  the  Government 
claim.  The  principal  of  Government  claim  is  equal  to  the  first  mortgage,  and 
to  this  must  be  added  the  unpaid  interest,  which  is  now  about  equal  to  the 
principal.  When  the  Government  enforces  its  lien  with  the  accumulated  interest 
it  not  only  doubles  the  debt,  but  increases  it  at  least  three-fold,  being  an  average 
debt  on  the  whole  line  of  something  over  $100,000  a mile,  which  if  exacted  from 
the  local  trade  must  necessarily  prevent  the  development  of  Nevada  and  the  in- 
terior part  of  the  country.  If  used  for  the  development  of  the  country,  by  the 
building  of  more  branch  railroads  which  shall  be  free  from  debt,  with  regulations 
by  Congress  requiring  cheap  freights,  that  country  can  be  developed  and  will 
prosper,  but  not  otherwise. 

Now,  in  order  that  the  burden  of  this  enterprise  may  not  fall  upon  a few  and 
to  show  that  it  ought  to  be  borne  generally  by  the  country,  I want  to  remind  the 
Senate  of  the  circumstances  under  which  this  road  was  built,  for  it  is  claimed  that 
•as  early  as  1834  the  question  of  building  a Pacific  railroad  was  agitated — long 
before  the  Mexican  war. 

It  was  the  dream  of  many  enterprising  men,  rather  enthusiastic  perhaps,  that 
a railroad  from 

NEW  YORK  TO  THE  MOUTH  OF  THE  COLUMBIA  RIVER 

would  certainly  be  constructed.  This  was  agitated  from  time  to  time.  I need 
not  go  into  the  history  of  it  in  detail,  but  it  finally  attracted  the  attention  of 
Congress.  In  1 853  the  first  act  of  Congress  looking  to  the  construction  of  a 
Pacific  railroad  was  passed,  as  follows  : 

Sec.  10.  And  be  it  further  enacted , That  the  Secretary  of  War  be,  and  he  is 
hereby,  authorized,  under  the  direction  of  the  President  of  the  United  States,  to 
employ  such  portion  of  the  corps  of  topographical  engineers,  and  such  other  per- 
sons as  he  may  deem  necessary,  to  make  such  explorations  and  surveys  as  he 


may  deem  advisable,  to  ascertain  the  most  practicable  and  economical  route  for 
a railroad  from  the  Mississippi  River  to  the  Pacific  Ocean,  and  that  the  sum  of 
$150,000,  or  so  much  thereof  as  may  be  necessary,  be,  and  the  same  is  hereby, 
appropriated  out  of  any  money  in  the  Treasury  not  otherwise  appropriated,  to 
defray  the  expense  of  such  explorations  and  surveys. 

In  the  deficiency  bill  which  passed  the  next  year  the  following  provision  was 
contained : 

For  deficiencies  for  the  railroad  surveys  between  the  Mississippi  River  and  the 
Pacific  Ocean,  $40,000. 

In  1854  another  appropriation  was  made  in  the  following  words : 

For  continuing  the  explorations  and  surveys  to  ascertain  the  best  route  for  a 
railway  to  the  Pacific,  and  for  completing  the  reports  of  surveys  already  made, 
the  sum  of  $150,000. 

Under  these  appropriations  five  routes  were  surveyed,  explored,  and  reported 
upon.  The  reports  contain  much  valuable  information  and  show  great  diligence 
and  research.  They  are  contained  in  thirteen  quarto  volumes  about  the  size  of 
the  Congressional  Record,  in  which  each  route  is  reported  upon,  and  all  the 
peculiarities  of  climate,  soil,  topography,  etc.,  are  set  forth.  When  the  surveys 
were  completed,  on  the  27th  of  February,  1855,  Mr.  Jefferson  Davis,  then  Sec- 
retary of  War,  transmitted  a report  to  Cbngress  of  these  surveys,  together  with 
the  estimates  of  the  cost  of  the  various  routes.  The  northern  route,  about  the 
forty- seventh  parallel,  was  the  first  route  which  was  agitated  and  discussed,  it 
having  been  considered  prior  to  the  Mexican  war,  as  I before  observed,  with  a 
view  of  having  a railroad  constructed  from  New  York  City  to  the  mouth  of  the 
Columbia  River.  It  is  the  first  route  mentioned  in  the  report. 

After  stating  in  general  terms  what  the  report  contains  Mr.  Davis  says  that 
the  estimated  cost  by  the  engineers  was  $117,000,000.  He  then  states  that  there 
must  be  added  to  that  about  25  per  cent,  on  account  of  additional  cost  over  the 
construction  of  Eastern  railroads  between  St.  Paul,  the  starting  point,  and  the 
Rocky  Mountains,  and  that  through  the  mountain  regions  it  would  be  required 
to  make  an  additional  allowance  of  about  100  per  cent.  He  therefore  concludes 
that  it  would  cost  $140,000,000  to  construct  the  road  without  equipment,  but 
with  the  equipment,  rolling-stock,  etc.,  it  would  cost  $10,000,000  more,  making 
$150,000,000. 

THE  CENTRAL  ROUTE. 

The  central  route  is  next  considered,  from  Council  Bluffs  to  Benicia.  The 
engineers’  estimate  in  the  office,  Mr.  Davis  said  in  this  case,  was  $116,000,000. 
He  did  not  state  how  much  additional  allowance  should  be  made  on  account  of 
its  being  more  difficult  to  construct  than  in  the  Eastern  country,  but  observed 
that  it  was  more  difficult  than  the  northern  route,  because  they  could  only  build 
from  the  two  ends,  while  on  the  northern  route  transportation  on  the  Missouri 
and  Columbia  Rivers  would  enable  the  construction  of  this  route  to  be  advanced 
from  different  points ; consequently  the  required  additional  allowance  would 
certainly  be  as  great  on  the  central  as  on  the  northern  route.  It  is  true  the  esti- 
mate was  $1,000,000  less  than  the  northern  route,  but  from  the  facts  given  by 
Mr.  Davis  the  cost  would  certainly  have  been  equal  to  the  northern  and  perhaps 
greater  ; that  is,  $150,000,000  for  the  construction  and  equipment  of  this  road. 

The  next  route  was  from  a point  on  the  Missouri  River  at  the  mouth  of  the 
Kansas  River,  so  as  to  make  a comparatively  straight  line  from  St.  Louis  to  San 


6 


Francisco.  The  obstacles  on  this  route  were  found  so  great  that  it  was  regarded 
as  impracticable. 

The  next  route  was  the  thirty-fifth  parallel.  The  estimate  of  the  engineers  of 
the  cost  of  this  route  was  $169,000,000  ; but  Mr.  Davis  says  that  must  be  a mis- 
take ; that  they  over  estimated  it ; but  he  does  not  say  to  what  extent,  and,  as 
subsequent  events  showed,  he  was  correct  in  disagreeing  with  their  estimates  on 
that  route. 

The  fifth  route  was  on  the  thirty-second  parallel,  to  start  from  a point  on  the 
Gulf  in  Texas,  at  a place  called  Fulton,  and  running  from  there  to  San  Francisco. 
The  estimated  cost  of  this  route  was  $93,000,000  and  the  reasons  are  given  at 
considerable  length  by  Mr.  Davis  why  it  could  be  built  cheaper  on  this  route 
than  any  other.  But  it  may  be  observed  that  if  this  route  had  been  chosen  it 
would  not  have  answered  the  purpose  of  commerce.  It  would  have  been  a long 
way  in  getting  around  from  New  York  and  it  would  not  have  served  the  purposes 
desired ; besides  Texas  was  then  in  rebellion,  which  fact  precluded  the  consider- 
ation of  a road  on  the  thirty-second  parallel  at  that  time. 

These  estimates  were  made  as  preliminary  to  the  granting  of  aid  for  the  con- 
struction of  a continental  road,  and  many  speeches  were  made  on  the  subject 
during  the  period  of  these  appropriations  when  it  was  regarded  as  a military 
necessity.  The  two  political  parties,  following  up  the  explorations  which  had 
been  made  by  the  Government,  declared  from  time  to  time  that  it  was  both  a 

COMMERCIAL  AND  A POLITICAL  NECESSITY 

and  should  be  aided  by  the  Government.  The  Democratic  convention  that  was 
held  in  1860  in  Charleston  so  declared ; the  convention  that  was  held  in  Chicago, 
which  nominated  Mr.  Lincoln,  so  declared ; and  some  seventeen  or  eighteen  of 
the  States,  if  I recollect  aright,  passed  like  resolutions.  It  was  the  general  sen- 
timent that  the  road  should  be  constructed  by  the  Government,  and  these  esti- 
mates of  cost  were  made  for  that  purpose. 

While  I am  speaking  of  these  estimates  of  the  cost  I will  anticipate  a little  and 
refer  to  what  the  roads  did  actually  cost.  The  Government  bonds  issued  in  aid 
of  the  construction  of  the  main  line  amounted,  in  round  numbers,  to  $55,000,000. 
The  roads  were  authorized  to  issue  a like  amount  of  first-mortgage  bonds,  mak- 
ing the  aggregate  cost  from  Council  Bluffs  to  San  Francisco  of  about  $110,000,000. 

The  road  was,  therefore,  constructed  for  $40,000,000  less  than  the  estimate 
of  the  War  Department,  which,  as  I have  shown,  was  $150,000,000.  I am  of 
opinion  that  if  the  road  had  been  constructed  by  the  Government  under  the  charge 
of  the  engineers  of  the  Army,  it  would  have  cost  the  full  amount  that  was  esti- 
mated by  the  engineers.  I have  never  known  any  work  constructed  by  them  to 
be  done  much  more  cheaply  than  the  estimate.  It  generally  exceeds  the  esti- 
mates. It  must  be  remembered  that  this  road  was  constructed  not  as  antici- 
pated, deliberately,  when  the  engineers  made  their  estimate,  but  it  was  con- 
structed in  a time  of  war,  when  prices  were  from  two  to  three  times  as  much 
as  they  were  before  the  war,  and  when  the  discount  on  the  paper  money  of  the 
Government  was  about  30  per  cent. 

So  it  will  be  seen  that  the  railroad  was  constructed  more  cheaply  than  was 
anticipated  by  Congress  when  the  act  was  passed,  because  Congress  had  before 
it  the  estimates  of  its  own  officers  as  to  the  probable  cost. 

Much  has  been  said  about  the  extravagance  of  these  appropriations,  and  we 


7 


have  investigations  into  little  things  that  are  very  annoying  and  expensive  as  to 
how  these  roads  were  constructed  and  how  the  various  expenditures  were  made. 
It  seems  to  me  in  dealing  with  the  grand  result  we  have  no  time  to  consider  all 
these  details.  We  should  take  the  situation  as  presented  in  a larger  sense  and 
see  whether  the  result  obtained  is  all  that  could  have  been  reasonably  antici- 
pated. I think  it  is. 

Not  only  this,  but  the  road  was  constructed 

SEVEN  YEARS  BEFORE  THE  TIME 

limited  in  the  act  for  its  completion.  There  were  matters  connected  with  its  con- 
struction which  added  very  much  to  the  cost.  But  the  reasons  for  constructing 
the  road  at  that  time,  as  given  by  every  man  who  addressed  either  House  of 
Congress,  were  of  a national  character.  The  principal  reason  assigned  was  the 
urgent  military  necessity  to  enable  the  Government  to  protect  the  Pacific  States 
and  retain  them.  All  the  national  advantages  that  were  pictured  during  that 
discussion,  to  which  I will  call  attention,  have  been  fully  realized.  There  is  no 
question  about  that.  An  empire  has  been  created  west  of  the  Mississippi,  and 
between  that  and  the  Pacific  coast,  which  will  furnish  many  important  States  of 
this  Union,  the  development  of  which  was  advanced  for  a generation  by  this  ap- 
propriation. No  man  at  the  time  this  was  done  was  able  to  picture  anything 
like  we  now  see.  The  expectations  have  been  more  thap  realized.  If  it  is  said 
that  the  roads  could  be  built  cheaper  now  after  the  country  is  developed  and 
when  there  is  business,  we  shall  not  deny  it ; but  we  must  take  into  considera- 
tion the  time  when  the  contract  was  made,  the  circumstances  under  which  it 
was  made,  not  only  of  the  Government,  but  of  the  parties  who  undertook  the 
work,  in  coming  to  a conclusion  whether  there  has  been  an  unreasonable  expendi- 
ture of  money.  Certainly  no  more  was  spent  than  was  authorized  by  Congress. 

The  fact  that  after  the  road  was  constructed  the  country  commenced  filling 
up  was  natural,  both  in  California  and  at  this  end,  and  the  road  finally  became 
a sufficient  success  to  make  the  stock  valuable,  which  nobody  would  take,  to  my 
certain  knowledge,  at  the  time  the  road  was  in  process  of  construction.  I say 
the  unexpected  success  of  the  enterprise  was  such  that  the  stock  became  of  some 
value,  and  consequently  those  engaged  in  the  enterprise  made  money.  But  this 
was  not  anticipated  by  anybody.  On  the  contrary,  the  projectors  were  regarded 
as  fanatics  for  undertaking  such  a hazardous  scheme. 

Without  going  into  detail  in  regard  to  the  situation  of  my  constituents,  I sug- 
gest that  they  are 

NOT  ABLE  TO  PAY  THE  ENORMOUS  DEBT 

of  the  Central  Pacific  Railroad.  They  are  not  able  to  pay  this  money  back  to 
the  Government,  and  if  this  company  is  forced  to  do  it  it  never  can  or  will 
build  branch  lines.  The  result  will  be  that  we  must  continue  to  pay  high  freights 
and  be  taxed  during  the  next  fifty,  sixty,  or  one  hundred  years,  to  pay  for 
this  great  national  war  measure,  which  has  added  thousands  of  millions  to  the 
wealth  of  the  nation  and  its  taxable  property  and  demonstrated  the  fact  that  a 
trans-continental  road  could  be  built,  and  induced  others  to  engage  in  like  enter- 
prises. This  and  the  other  land-grant  roads  have  caused  the  construction  directly 
of  about  20,000  miles  of  road,  and  indirectly,  it  is  estimated,  of  as  much  more. 

This  expenditure  of  $55,000,000  having  been  paid  by  the  Government  for  this 
national  object,  and  it  having  accumulated  now  to  $100,000,000  or  more,  it  seems 


8 


to  me  that  the  use  of  this  $100,000,000  in  building  branch  lines  and  construct- 
ing reservoirs  and  other  hydraulic  works  for  irrigation  under  such  regulations  as 
Congress  shall  hereafter  prescribe  would  be  better  than  eking  this  vast  sum  out 
of  the  people  living  along  the  line  of  these  roads.  Such  use  of  the  money  would 
give  a better  return  than  any  amount  we  may  ultimately  collect.  It  would 
yield  more  money  to  the  Government  in  the  way  of  taxable  property,  and  furnish 
that  region  with  roads  and  cheap  transportation. 

The  legislation  of  Congress  since  the  construction  of  the  road  has  not  followed 
the  spirit  of  the  original  act.  That  act  provided  that  when  the  net  proceeds  of  the 
road  exceeded  10  per  cent,  of  cost  of  construction  Congress  might  reduce  fares 
and  freights.  During  all  this  agitation  there  has  never  been  any  effort  made  to 
reduce  fares  and  freights,  or  to  ascertain  whether  Congress  might  do  it ; but 
there  has  been  every  effort  made  to  further  incumber  the  roads.  The  legislation 
has  been  in  that  direction. 

The  Thurman  act 

WAS  THE  MOST  HOSTILE  MEASUEE 

to  the  people  living  along  the  road  that  could  have  been  devised.  It  was  not  in 
the  interest  of  the  people  nor  of  the  Government.  Under  it  there  has  been  in- 
vested for  these  railroads  in  bonds  $4,108,621.17,  the  price  of  the  bonds  at  the 
time  the  investment  was  made.  That  is  the  cost  of  the  bonds  which  were  pur- 
chased. It  was  the  market  price  at  the  time  they  were  purchased.  The  market 
value  of  these  bonds  now  is  $3,820,902.50,  a decrease  in  the  value  of  the  bonds 
by  nearing  the  hour  of  maturity  of  $287,759.17,  making  a loss  to  the  company 
of  something  like  $969,621.17. 

Nobody  has  been  benefited  by  the  shrinking  investment  of  the  sinking  fund 
provided  by  this  act.  It  simply  has  increased  the  obligations  of  the  company 
and  made  it  more  difficult  for  it  to  meet  them. 

There  is  no  greater  evil  than  to  have  a railroad  running  through  a country 
which  nobody  has  an  interest  in.  If  the  Government  is  going  to  lay  such  bur- 
dens upon  the  Pacific  railroads  that  nobody  has  any  interest  to  take  care  of 
them  and  nobody  can  build  branch  roads  and  keep  along  with  the  times,  it  is  a 
very  bad  thing  to  have  such  a road  in  a State. 

What  we  want  is  more  branch  roads,  and  we  want  those  branch  roads  free 
from  incumbrances,  and  we  want  Congress  to  make  terms  as  to  the  rates  of  fares 
and  freight  so  that  we  can  have  cheap  service.  That  is  what  Nevada  wants.  That 
is  what  every  one  of  the  Territories  wants.  That  is  the  legislation  that  ought 
to  be  had. 

The  idea  of  collecting  this  debt  from  the  roads  never  entered  into  the  head  of 
any  member  of  the  Congress  that  passed  the  act  otherwise  than  by  services  to  be 
rendered  by  the  roads  to  the  Government.  The  only  provision  in  the  original  act 
of  1862  for  reimbursement  was  five  percent,  of  the  net  earnings  and  the  amount 
of  transportation  and  telegraphing  to  be  performed  for  the  Government.  This 
was  to  be  deducted  from  the  principal  and  interest,  and  it  was  shown  by  various 
parties  that  this  provision  would  not  only  pay  the  interest,  but  it  would  pay  the 
debt  and  redeem  the  bonds  long  before  maturity. 

Many  inquiries  were  made  during  the  debate  as  to  how  the  bonds  would  be 
paid.  The  answer  invariably  was  that  the 

BONDS  WOULD  BE  PAID  IN  GOVERNMENT  SERVICE, 

and  the  bill  so  provided. 


9 


The  act  of  18G2  was  not  liberal  enough  in  terms  to  secure  the  construction  of 
the  road.  The  Central  Pacific,  however,  undertook  it  and  built  a short  piece  of 
road  near  Sacramento.  The  Union  Pacific  did  not  undertake  it  at  all.  They  had 
organized,  but  did  not  undertake  the  work.  In  1861  the  act  was  amended  and 
much  more  liberal  provisions  were  inserted.  It  was  provided  that  these  roads 
might  make  a first  mortgage  equal  to  the  bonds  issued  by  the  Government.  Ac- 
cording to  the  original  act  bonds  were  to  be  issued  as  each  forty  miles  of  road  was 
completed.  This  was  changed  so  that  bonds  were  issued  as  each  section  of 
twenty  miles  was  completed..  It  was  provided  also  that  instead  of  the  Government 
retaining  all  of  the  earnings  of  the  roads  for  Government  service  only  one-half 
should  be  retained ; and  it  was  contended  then  that  one-half  of  the  freight 
and  other  Government  service  would  pay  the  bonds  before  they  were  due. 
But  Congress  in  all  these  acts  insisted  upon  the  Government  service  being 
done  by  the  transportation  of  munitions  of  war  and  all  other  Government 
supplies.  That  was  not  changed  in  the  later  act,  but  it  was  required  ; and  in 
the  act  of  1864  the  Gove:nment  agreed  to  retain  only  half  of  the  compensation 
due  the  roads  for  Government  service.  Under  this  changed  contract  the  road 
was  constructed. 

To  show  that  it  was  not  anticipated  that  this  debt  should  be  paid  by  the 
local  traffic  on  the  roads  I shall  read  some  extracts  from  the  debate.  I want  it 
paid  as  much  as  any  one,  but  I want  it  paid  in  such  a manner  as  to 

DEVELOP  THE  COUNTRY 

aud  answer  the  original  purpose.  I do  not  want  it  paid  alone  by  my  State  or  by  the 
other  localities  through  which  the  road  runs,  for  it  cannot  be  paid  in  that  way. 
If  you  increase  the  obligations  of  the  road  no  branches  will  be  built,  the  freights 
cannot  be  reduced,  and  the  people  of  my  State  will  continue  to  suffer.  On  the 
contrary,  if  the  indebtedness  of  the  Central  Pacific  to  the  Government,  which 
now  amounts  in  round  numbers  to  about  $50,000,000,  is  expended  in  building 
branch  lines  to  be  approved  by  the  Government,  in  constructing  reservoirs  and 
other  works  for  irrigation  along  those  branch  lines,  so  that  people  can  live  there 
and  there  will  be  some  business  to  sustain  them — if  that  is  done  a great  good  will 
be  accomplished. 

I am  not  in  favor  of  appropriating  money  from  the  Treasury  to  go  into  any 

EXTRAVAGANT  SCHEMES  OF  DEVELOPMENT 

of  that  new  country,  but  this  is  exceptional.  The  money  has  been  loaned  by  the 
Government  for  a great  national  purpose.  It  never  was  expected  to  be  returned 
in  any  way  except  in  Government  service.  It  has  not  been  so  returned,  but  it 
has  saved  the  Government  all  that  was  expected  in  giving  it  good  mail  facilities 
and  cheapening  transportation.  It  has  saved  more  than  the  debt  over  and  over 
again. 

That  having  been  done  and  there  being  an  obligation  on  the  part  of  these  roads, 
as  we  assume,  to  pay  the  whole  of  this  debt,  both  companies  appear  willing  to 
do  it,  but  they  are  not  the  only  parties  interested.  A vast  country  between  the 
Missouri  Kiver  and  San  Francisco  is  interested.  Its  prosperity  is  involved  in  it, 
its  development  is  dependent  upon  the  correct  policy  to  be  pursued. 

If  this  indebtedness  is  paid  by  requiring  the  companies  to  pay  every  dollar  and 
put  it  into  new  roads  that  are  freed  from  incumbrances,  and  into  irrigation  works, 
to  furnish  business  for  the  roads  they  will  be  strong  enough  to  pay  it,  because 


10 


as  the  population  increases  there  will  be  somebody  there  to  bear  the  burden,  and 
in  that  way  we  will  be  sure  to  get  the  debt  paid.  There  will  bo  no  defalcation 
if  you  let  our  enterprising  people  have  a place  to  make  homes  and  develop  our 
mines  and  agricultural  resources  ; the  burdens  will  then  be  easily  borne.  The 
road  can  pay  this  debt  to  the  Government  in  a way  that  will  add  more  to  the  re- 
sources of  the  country  and  relieve  the  people  more  of  taxation  generally  than  any 
scheme  of  collecting  it  in  long  bonds.  We  should  hardly  feel  the  little  driblets 
that  would  go  into  the  Treasury  in  that  way,  besides  every  dollar  exacted  from 
the  people 

WOULD  TEND  TO  DEPRESS  BUSINESS 

in  that  country. 

As  I said  before,  the  railroad  land  grants  and  these  money  subsidies  directly 
secured  the  construction,  in  round  numbers,  of  20,000  miles  of  railroad,  and  in- 
directly of  as  much  more,  according  to  the  estimates  of  the  statisticians  and  per- 
sons engaged  in  collecting  the  facts  upon  the  subject.  That  is  the  accomplish- 
ment of  a great  deal,  and  it  only  involved  an  expenditure  of  $55,000,000  on  the 
part  of  the  United  States  and  the  donation  of  land  otherwise  inaccessible. 

England,  in  dealing  with  India,  found  a similar  problem  to  what  we  have,  and 
that  government  solved  it  by  direct  appropriation,  or  by  Indian  bonds  indorsed 
by  the  Government  of  Great  Britain.  They  have  spent  during  the  last  thirty 
years  about  one  thousand  millions  of  dollars  in  railroads,  irrigation  works,  and 
other  internal  improvements,  and  they  report  that  so  far  from  burdening  the 
treasury  it  has  relieved  the  treasury  several  millions  each  year,  besides  the  great 
prosperity  it  has  given  that  country. 

We  are  not  in  a condition  to  conduct  business  as  they  do.  We  have  no  strong 
despotic  government  to  do  that,  but  we  have  made  a little  experiment  in  invest- 
ments similar  to  those  made  in  India.  It  is  true  the  investment  we  have  made 
is  small,  but  the  returns  have  been  most  satisfactory.  Our  Government  appears 
to  have  lost  sight  of  the 

REAL  OBJECTS  AND  PURPOSES 

for  which  the  money  was  expended,  for  whose  benefit  it  was  expended,  and  how 
payment  was  to  be  made,  and  Congress  now  is  trying  to  collect  the  money  from 
the  people  along  this  particular  line  without  regard  to  the  injury  which  such  a 
course  must  inflict. 

I will  read  a paragraph  from  the  “Finances  and  Public  Works  of  India,  1869- 
1881.”  They  have  continued  since  1881  quite  as  vigorously  as  before  in  expen- 
ditures, particularly  with  regard  to  expenditures  for  irrigation.  The  extract  that 
I wish  to  read  is  as  follows  : 

The  magnitude  of  the  work  that  has  been  accomplished  is  extraordinary.  The 
England  of  Queen  Anne  was  hardly  more  different  from  the  England  of  to  day 
than  the  India  of  Lord  Ellenborough  from  the  India  of  Lord  Ripon.  The  coun- 
try has  been  covered  with  roads,  her  almost  impassable  rivers  have  been  bridged, 
9,000  miles  of  railway  and  20,000  miles  of  telegraph  lines  have  been  constructed, 
8,000,000  acres  of  laud  have  been  irrigated,  and  we  have  spent  on  these  works, 
in  little  more  than  20  years,  some  £150,000,000. 

That  is  about  $750,000,000.  In  this  work  also  they  estimate  that  the  railroads 
to  be  constructed  will  amount  to  20,000  miles,  and  the  amount  of  land  to  be  ir- 
rigated to  many  millions  of  acres.  When  they  first  proposed 

TO  REVIVE  THE  OLD  IRRIGATION  WORKS 

and  construct  new  ones  to  stop  famines  in  India  they  had  an  estimate  made.  The 


11 


first  estimate  was  $115,000,000.  They  have  expended  much  more  than  that  al- 
ready and  they  are  going  on  with  the  work,  and  they  report  that  it  has  improved 
the  revenue  and  that  the  income  is  much  greater  than  the  interest  on  the  out- 
lay. The  scheme  is  entirely  satisfactory  from  the  reports  that  they  make  from 
year  to  year. 

It  will  not  be  necessary  for  the  United  States  to  expend  like  sums  of  money  to 
redeem  the  1,200,000  square  miles  of  arid  land  of  our  country,  which  is  as  good 
as  India,  and  exceeds  British  India  in  area  about  one-third.  British  India  has 
800,000  square  miles  and  sustains  a population  of  over  two  hundred  millions. 
It  is  not  expected  that  our  Government  will  imitate  in  all  respects  the  example 
of  Great  Britain  in  India,  but  this  money  having  already  been  expended  for  a 
great  national  purpose,  it  seems  to  me  that  it  would  be  reasonable  to  use  the  in- 
debtedness of  the  companies  in  such  a manner  that  it  will  not  only  carry  out 
the  great  purpose  for  which  it  was  originally  designed,  but  develop  the  country 
through  which  these  roads  pass.  I told  my  constituents  that  on  the  railroad 
question  I would  do  that  which  I thought  would  be 

FOB  THE  GOOD  OF  MY  STATE 

and  the  people  generally,  and  I will  be  governed  by  those  rules  throughout. 
I shall  not  be  moved  by  clamor  against  or  partiality  for  the  railroads,  for  I think 
that  they  are  in  a position  where  they  can  pay  this  money  in  the  way  I have  in- 
dicated in  my  resolution  of  instructions  to  the  committee. 

For  the  purpose  of  showing  that  we  are  attempting  now  to  realize  a different 
consideration  from  what  was  anticipated  by  either  party  at  the  time  this  contract 
was  entered  into,  I will  read  a few  extracts  from  speeches  that  were  made  when 
the  bill  was  under  consideration  in  the  two  Houses  of  Congress.  Mr.  Campbell, 
in  the  House  of  Representatives,  April  2, 1862,  in  discussing  the  question  said  : 

In  a recent  imminent  peril  of  a collision  with  a naval  and  commercial  rival, 
one  that  bears  us  no  love,  we  ran  the  risk  of  losing,  at  least  for  a time,  our  golden 
possessions  on  the  Pacific  for  want  of  proper  land  transportation. 

Mr.  Stevens,  of  Pennsylvania,  in  the  same  debate  said  : 

In  case  of  war  with  a foreign  maritime  power  the  travel  by  the  Gulf  and  Isth- 
mus of  Panama  would  be  impracticable.  And  such  European  power  could 
throw  troops  and  supplies  into  California  much  quicker  than  we  could  by  the 
present  overland  route.  The  enormous  cost  of  supplying  our  army  in  Utah  may 
teach  us  that  the  whole  wealth  of  the  nation  would  not  enable  us  to  supply  a 
large  army  on  the  Pacific  coast.  Our  Western  States  must  fall  a prey  to  the  en- 
emy without  a speedy  way  of  transporting  our  troops. 

Mr.  Wilson,  of  Massachusetts,  when  the  bill  was  pending  in  the  Senate,  said : 

I have  little  confidence  in  the  estimates  made  by  Senators  or  Members  of  the 
House  of  Representatives  as  to  the  great  profits  which  are  to  be  made  and  the 
immense  business  to  be  done  by  this  road.  I give  no  grudging  vote  in  giving 
away  either  money  or  land.  I would  sink  $100,000,000  to  build  the  road,  and 
do  it  most  cheerfully,  and  think  I had  done  a great  thing  for  my  country  if  I 
could  bring  it  about.  What  are  seventy-five  or  a hundred  millions  in  opening 
a railroad  across  the  central  regions  of  this  continent,  which  will  connect  the 
people  of  the  Pacific  and  the  Atlantic  and  bind  them  together  ? 

Again  he  said  during  the  same  debate  : 

As  to  the  security — 

And  I want  to  call  particular  attention  to  this — 

As  to  the  security  the  United  States  takes  on  this  road,  I would  not  give  the 


12 


paper  it  is  written  on  for  the  whole  of  it.  I do  not  suppose  it  is  ever  to  come 
back  in  auy  form  except  in  doing  on  the  road  the  business  we  need,  carrying  our 
mails  and  munitions  of  war.  In  my  judgment  we  ought  not  to  vote  for  the  bill 
with  the  expectation  or  with  the  understanding  that  the  money  which  we  advance 
for  this  road  is  ever  to  come  back  into  the  Treasurj7  of  the  United  States.  I vote 
for  the  bill  with  the  expectation  that  all  we  get  out  of  the  road,  aud  I think  that 
is  a great  deal,  will  be  the  mail  carrying  and  the  carrying  of  munitions  of  war 
and  such  things  as  the  Government  needs,  and  I vote  for  it  cheerfully  with  that 
view.  I do  not  expect  any  of  our  money  back.  I believe  no  man  can  examine 
the  subject  and  believe  that  it  will  come  back  in  any  other  way  than  is  provided 
for  in  this  bill ; aud  that  provision  is  for  the  carrying  of  the  mails  and  doing 
certain  other  work  for  the  Government. 

Mr.  Clark,  of  New  Hampshire,  expressed  his  views  upon  this  question  and  how 
he  understood  the  effect  of  the  bill,  as  follows  : 

The  Senator  from  Massachusetts  may  be  entirely  right,  that  the  Government 
may  never  receive  back  this  money  again ; and  it  may  be  that  we  make  the  loan 
for  the  purpose  of  receiving  the  services.  But  it  will  be  well  to  take  a mort- 
gage, to  secure  the  building  of  the  road  through,  and  then  to  secure  the  perform- 
ance of  those  services  which  we  expect  them  to  perform  in  the  transmission  of 
mails  aud  munitions  of  war  after  the  road  is  built.  I think  we  had  better  adopt 
the  amendment  of  the  committee.  It  will  make  it  safer  for  the  Government  : 
safer  in  this  regard,  that  we  shall  have  the  road  built  and  have  the  service  per- 
formed. 

Mr.  Clark  further  remarked  : 

Whether  I am  right  or  not,  I do  not  build  the  road  because  I think  it  is  to  be 
a paying  road.  I build  it  as  a political  necessity,  to  bind  the  country  together 
and  hold  it  together ; and  I do  not  care  whether  it  is  to  pay  or  not.  Here  is  the 
money  of  the  Government  to  build  it  with.  I want  to  hold  a portion  of  the  money 
until  we  get  through,  and  then  let  them  have  it  all. 

He  did  not  care  whether  it  was  to  pay  or  not ; we  were  going  to  have  these 
other  advantages.  And  nowit  is  not  propQsedto  have  this  debt  paid  by  Govern- 
ment service,  but  to  make  the  people  who  live  on  the  line  of  the  road  pay  it. 
The  company  is  willing  to  pay  it  if  we  give  (hem  time  enough,  no  matter  what  the 
consequences  may  be. 

Mr.  Ten  Eyck,  of  New  Jersey,  expressed  himself  in  this  wise  : 

The  great  object  of  the  Pacific  railroad  bill  is  to  have  a national  means  of 
communication  across  the  continent.  That  is  the  idea  which  the  public  have  en- 
tertained for  years  past,  and  the  only  idea;  a great  national  measure  to  cement 
the  Union,  to  bind  with  a belt  of  iron  the  Atlantic  and  Pacific.  * * * This  is 

the  inducement  which  the  old  States  have  in  doing  what  they  believe  will  be  for 
the  benefit  of  the  common  country,  to  the  prejudice  of  the  Treasury,  so  to  speak, 
37et  the  general  returns  may  be  beneficial  in  the  long  run. 

Is  it  not  manifest  that  it  was  not  anticipated  that  the  local  business  along  this 
road  should  pay  all  this  debt?  It  was  supposed  that  there  would  be  through 
business  and  Government  service.  The  local  business  was  hardly  considered. 
But  contrary  to  expectation  the  through  business  is  divided  up  among  rival 
roads,  also  aided  by  the  Government.  The  Northern  Pacific,  the  Atlantic  and 
Pacific,  and  now  the  Canadian  Pacific,  come  in,  dividing  up  Ihe  through  busi- 
ness and  bringing  it  down  to  the  lowest  possible  point,  so  that  there  is  little 
profit  in  it,  and  the  payment  of  the  debt,  if  paid  at  all,  has  to  come  out  of  the 
local  business. 


13 


I do  not  complain  of  the  policy  which  subsidized  the  other  lines.  The  North- 
ern Pacific  land  subsidy  was 

WORTH  TWICE  AS  MUCH  AS  ALL  THE  SUBSIDIES 

given  to  the  Central  and  Union  roads,  including  bonds  and  land.  I do  not  ob- 
ject to  that.  It  has  built  up  the  country  and  made  States  that  we  are  about 
to  admit  into  the  Union.  Dakota,  Montana,  and  Washington  are  coming  into 
the  Union  without  a dissenting  voice.  It  has  created  four  great  States.  I ad- 
vocated the  subsidy  for  the  Northern  Pacific  ; but  the  direct  effect  of  it  was  to 
draw  its  share  of  the  business  away  from  the  other  subsidized  lines  and  throw 
the  burden  of  paying  this  debt  upon  the  people,  which  they  can  not  bear. 

The  Union  Pacific  is  better  situated  than  the  Central.  It  passes  through  a 
great  deal  of  good  country.  But  if  you  load  the  debt  on  the  Union  Pacific  I 
predict  that  it  will  be  a failing  institution;  that  it  can  not  compete  with  its 
rivals  ; that  it  will  be  impoverished ; and  carrying  this  load  is  going  to  be  a tax 
and  a burden  upon  the  people  living  along  that  line  that  they  ought  not  to  bear. 

The  Central  Pacific  has  no  resources  other  than  its  line  in  Nevada  and  Cali- 
fornia. It  is  without  branches  in  Nevada.  The  construction  of  the  Central 
Pacific  road  was  vastly  more  expensive  than  the  Union.  It  was  regarded  almost 
as  impossible.  Most  engineers  thought  it  was  a wild  scheme  to  attempt  to  build 
it  at  all. 

Loaded  with  this  great  debt,  any  scheme  to  collect  it  without  allowing  the 
money  to  be  used  for 

THE  DEVELOPMENT  OF  THE  COUNTRY 

is  an  unequal  and  unfair  distribution  of  the  burdens  of  this  Government,  and 
was  never  anticipated  when  the  law  was  passed. 

Here  is  what  Mr.  Collamer,  of  Vermont,  said.  A clearer-headed  man  never 
was  in  the  Senate.  He  was  a fair-minded,  judicial  man.  He  was  here  when  I 
first  came  to  the  Senate,  and  I learned  to  reverence  him  for  his  wisdom  and 
candor  and  fair-mindedness.  Mr.  Collamer  said  in  the  course  of  this  debate  on 
the  passage  of  the  first  bill : 

This  bill  carries  the  idea,  and  in  this  section  provides  for  the  repayment  of 
the  loan,  as  gentlemen  call  it.  In  a subsequent  section  it  is  provided  that  the 
payment  shall  bo  made  in  the  carrying  of  the  mail,  supplies,  and  military  stores 
for  the  Government  at  fair  prices,  and  also  5 per  ceut.  of  the  net  proceeds  or 
sums  to  be  set  apart  for  the  Government.  That  is  all  the  provision  there  is  in 
the  bill  for  repayment. 

Mr.  Latham,  of  California,  then  remarked  : 

The  loan  of  the  public  credit  at  G per  cent,  for  thirty  years  for  sixty-five  mil- 
lions— 

That  was  within  the  estimated  cost.  It  turned  out  to  be  ten  million  less  than 
was  actually  used — 

with  absolute  security  by  lien,  with  stipulations  by  sinking  fund  from  profits  for 
the  liquidation  of  the  principal,  official  reports  and  other  authoritative  data, 
show  that  the  average  annual  cost,  even  in  times  of  peace,  in  transportation  of 
troops,  with  munitions  of  war,  subsistence  and  quartermaster  supplies,  may  be 
set  down  as  $7. .‘>00, 000.  The  interest  upon  the  credit  loan  of  $05,000,000  will 
be  annually  $3,000,000,  leaving  a net  excess  of  $3,400,000  over  the  present  cost, 
appealing  with  great  force  to  the  economy  of  the  measure,  and  showing,  beyond 
cavil  or  controversy,  that  the  Government  will  not  have  a dime  to  pay  on  account 
of  its  credit,  nor  risk  a dollar  by  authorizing  the  construction  of  this  work. 


14 


It  was  costing  them  over  $7,000,000.  I investigated  that  afterwards  and  made 
a report  in  which  I showed  how  this  expense  came.  Subsequently  the  service 
performed  by  the  roads  for  the  Government  was  ten  times  greater  than  what 
was  formerly  required,  but  the  amount  paid  has  been  merely  nominal.  It  has 
been  performed  at  the  same  rates  charged  on  Eastern  roads.  Besides,  much  of 
the  Government  business,  and  perhaps  the  larger  part,  has  been  diverted  from 
this  road  to  other  continental  roads,  including  the  Canadian  road. 

The  amount  paid  to  the  subsidized  roads  for  the  Government  service  has  been 
a mere  bagatelle.  It  has  done  very  little  towards  keeping  down  the  interest, 
much  less  paying  the  principal,  of  the  bonds.  The  Government  has  saved  all 
the  money  it  anticipated,  but  it  has  not  allowed  it  to  the  railroads.  In  fact,  it 
has  diverted  freight  from  the  roads  and  made  limited  allowances,  so  that  the 
carrying  of  mails  and  the  service  done  for  the  Government  has  not  paid  off 
the  bonds  as  was  anticipated.  That  is  the  reason ; not  because  the  roads  did 
not  serve  as  good  a purpose  as  the  most  sanguine  ever  anticipated. 

Mr.  McDougal,  of  California,  a clear-headed  lawyer  and  a man  who  understood 
what  he  was  saying,  made  the  following  remarks  : 

As  I have  had  occasion  before  to  remark,  the  Government  is  now  paying  over 
seven  millions  per  annum  for  the  services  which  this  road  is  bound  to  perform. 
That  is  about  100  per  cent,  more  than  the  maximum  interest  upon  the  entire 
amount  of  bonds  that  will  be  issued  by  the  United  States  when  the  road  is  com- 
pleted. The  Government  is  to-day  on  a peace  establishment,  without  any  war 
necessity,  paying  for  the  same  services  100  per  cent,  more  than  the  entire  inter- 
est on  the  amount  of  bonds  called  for  by  the  bill.  Besides  that,  it  is  provided 
that  5 per  cent,  of  the  net  proceeds  shall  be  paid  over  to  the  Federal  Govern- 
ment every  year.  Now,  let  me  say  if  this  road  is  to  be  built,  it  is  to  be  built  not 
merely  with  the  money  advanced  by  the  Government,  but  by  money  out  of  the 
pockets  of  private  individuals.  * * * 

It  is  proposed  that  the  Government  shall  advance  sixty  millions,  or  rather 
their  bonds  at  thirty  years,  as  the  road  is  completed,  in  the  course  of  a series  of 
years ; that  the  interest  at  no  time  can  be  equal  to  the  service  to  be  rendered  by 
the  road  as  it  progresses ; and  that  the  Government  really  requires  no  service 
except  a compliance  on  the  part  of  the  company  with  the  contract  made.  It 
was  not  intended  that  there  should  be  a judgment  of  foreclosure  and  a sale  of 
this  road  on  a failure  to  pay.  We  wish  it  to  be  distinctly  understood  that  the 
bill  is  not  framed  with  the  intention  to  have  a foreclosure.  * * * In  case 

they  failed  to  perform  their  contract,  that  is  another  thing.  That  is  a stipula- 
tion ; that  is  a forfeiture,  in  terms  of  law ; a very  different  thing  from  a foreclo- 
sure for  the  non-payment  of  bonds.  The  calculation  can  be  simply  made  that  at 
the  present  amount  of  transportation  over  the  road,  supposing  the  Government 
did  no  more  business,  that  that  alone  would  pay  the  interest  and  the  principal 
of  the  bonds  in  less  than  twenty  years,  making  it  a direct  piece  of  economy  if 
the  Government  had  to  pay  for  them  all.  However,  I am  not  disposed  to  discuss 
this  matter.  I say  it  was  not  understood  that  the  Government  was  to  come  in 
as  a creditor  and  seize  the  road  on  the  non-payment  of  interest.  It  is  the  busi- 
ness of  the  Government  to  pay  the  interest  because  we  furnish  the  transporta- 
tion. 

Mr.  Sargent,  of  California,  said : 

When  the  road  is  fully  completed  and  we  are  experiencing  all  the  security  and 
commercial  advantages  which  it  will  afford,  the  annual  interest  will  be  less  than 
four  millions,  and  that  sum  will  be  but  gradually  reached  year  after  year. 
The  War  Department  has  paid  out,  on  an  average,  five  millions  per  year  for  the 
last  five  years  for  transportation  to  the  Pacific  const,  and  the  mails  cost  $1,000,- 
000  more  at  their  present  reduced  rates.  The  saving  to  the  Government  will  be 
two  millions  a year  on  these  items  alone. 


15 


The  case  has  been  before  the  courts  and  they  have  reviewed  these  laws  and 
stated  the  manifest  purpose  of  them.  In  1 Otto,  91,  Mr.  Justice  Davis,  com- 
menting upon  this  contract  between  the  roads  and  the  Government,  said : 

Many  of  the  provisions  in  the  original  act  of  1862  are  outside  of  the  usual 
course  of  legislative  action  concerning  grants  to  railroads,  and  can  not  be  prop- 
erly construed  without  reference  to  the  circumstances  which  existed  when  it  was 
passed.  The  war  of  the  rebellion  was  in  progress,  and,  owing  to  complications 
with  England,  the  country  had  become  alarmed  for  the  safety  of  our  Pacific  pos- 
sessions. The  loss  of  them  was  feared,  in  case  those  complications  should  result 
in  an  open  rupture ; but,  even  if  this  fear  were  groundless,  it  was  quite  apparent 
that  we  were  unable  to  furnish  that  degree  of  protection  to  the  people  occupy- 
ing them  which  every  government  owes  to  its  citizens.  It  is  true  the  threat- 
ened danger  was  happily  averted,  but  wisdom  pointed  out  the  necessity  of 
making  suitable  provision  for  the  future.  This  could  be  done  in  no  better  way 
than  by  the  construction  of  a railroad  across  the  continent.  Such  a road  would 
biud  together  the  widely  separated  parts  of  our  common  country  and  furnish  a 
cheap  and  expeditious  mode  for  the  transportation  of  troops  and  supplies.  If  it 
did  nothing  more  than  afford  the  required  protection  to  the  Pacific  States,  it  was 
felt  that  the  Government,  in  the  performance  of  an  imperative  duty,  could  not 
justly  withhold  the  aid  necessary  to  build  it ; and  so  strong  and  pervading  was 
this  opinion  that  it  was  by  no  means  certain  that  the  people  would  not  have 
justified  Congress  if  it  had  departed  from  the  then  settled  policy  of  the  country 
regarding  works  of  internal  improvement,  and  charged  the  Government  itself 
with  the  direct  execution  of  the  enterprise. 

This  enterprise  was  viewed  as  a national  undertaking  for  national  purposes ; 
and  the  public  mind  was  directed  to  the  end  in  view,  rather  than  to  the  particu- 
lar means  of  securing  it.  Although  this  road  was  a military  necessity,  there 
were  other  reasons  active  at  the  time  in  producing  an  opinion  for  its  completion, 
besides  the  protection  of  an  exposed  frontier.  There  was  a vast  unpeopled  ter- 
ritory lying  between  the  Missouri  and  Sacramento  rivers,  which  was  practically 
worthless  without  the  facilities  afforded  by  a railroad  for  the  transportation  of 
persons  and  property.  'With  its  construction,  the  agricultural  and  mineral  re- 
sources of  this  territory  could  be  developed,  settlements  made  where  settlements 
wTere  possible,  and  thereby  the  wealth  and  powrer  of  the  United  States  largely  in- 
creased ; and  there  was  also  the  pressing  want,  in  time  of  peace  even,  of  an  im- 
proved and  cheaper  method  for  the  transportation  of  the  mails  and  of  supplies 
for  the  Army  and  the  Indians.  It  was  in  the  presence  of  these  facts  that  Con- 
gress undertook  to  deal  with  the  subject  of  this  railroad.  The  difficulties  in  the 
way  of  building  it  were  great,  and  by  many  intelligent  persons  considered  insur- 
mountable. * * * Of  necessity  there  were  risks  to  be  taken,  in  aiding  with 

money  or  bonds  an  enterprise  unparalleled  in  the  history  of  any  free  people,  the 
completion  of  which,  if  practicable  at  all,  would  require,  as  was  supposed,  twelve 
years ; but  these  risks  were  common  to  both  parties.  Congress  was  obliged  to 
assume  its  share  and  advance  tho  bonds,  or  abandon  the  enterprise,  for  clearly 
the  grant  of  lands,  however  valuable  after  the  road  was  finished,  could  not  be 
available  as  a resource  for  building  it. 

And  again,  Justice  Miller,  in  the  case  of  the  United  States  against  tho  Union 
Pacific  Company,  in  98  United  States  Reports,  page  G19,  says : 

There  are  many  matters  alleged  in  the  bill  in  this  case,  and  many  points  ably 
presented  in  argument  which  have  received  our  careful  attention,  but  of  which  w’-e 
can  take  no  special  notice  in  this  opinion.  We  have  devoted  so  much  space  to 
the  more  important  matters  that  we  can  only  say  that  under  the  view  which  we 
take  of  the  scope  of  the  enabling  statute,  they  furnish  no  ground  for  relief  in  this 
suit.  The  liberal  manner  in  which  the  Government  has  aided  this  company  in 
money  and  land  is  much  urged  upon  us  as  a reason  why  the  rights  of  the  United 
States  should  be  liberally  construed.  This  matter  is  fully  considered  in  the  opinion 
of  the  court,  already  cited  in  the  case  of  the  United  States  v.  The  Union  Pacific 
Railroad  Company  (91  U.  S.  72),  in  which  it  is  shown  that  it  was  a wise  liberality 
for  which  the  Government  has  received  all  the  advantages  for  which  it  bargained, 


1G 


and  more  than  it  expected.  In  the  feeble  infancy  of  this  child  of  its  creation,  when 
its  life  and  usefulness  were  "^ery  uncertain,  the  Government,  fully  alive  to  its  im- 
portance, did  all  that  it  could  to  strengthen,  to  support,  and  to  sustain  it.  Since 
it  has  grown  to  a vigorous  manhood  it  may  not  have  displayed  the  gratitude  which 
so  much  care  called  for.  If  this  be  so,  it  is  but  another  instance  of  the  absence 
of  human  affections  which  is  said  to  characterize  all  corporations.  It  must,  how- 
ever, be  admitted  that  it  has  fulfilled  the  purpose  of  its  creation  and  realized  the 
hopes  which  were  then  cherished,  and  that  the  Government  has  found  it  a useful 
agent,  enabling  it  to  save  vast  sums  of  money  in  the  transportation  of  troops, 
mails,  and  supplies,  and  in  the  use  of  the  telegraph.  A court  of  justice  is  called 
on  to  inquire,  not  into  the  balance  of  bemfits  and  favors  on  each  side  of  this 
controversy,  but  into  the  rights  of  the  parties  as  established  by  law,  as  found  in 
their  contracts,  as  recognized  by  the  settled  principles  of  equity,  and  to  decide 
accordingly. 

Now,  when  it  is  so  perfectly  manifest  that  the  whole 

UNITED  STATES  HAS  HAD  THE  BENEFIT 

of  this  expenditure,  which  was  to  be  paid  by  Government  service,  shall  its 
payment  be  charged  upon  a particular  locality  ? If  this  road  was  the  only  through 
line,  if  it  made  money  out  of  its  through  business,  if  the  Government  trans- 
portation was  anything  near  what  was  anticipated,  this  state  of  things  would 
never  have  occurred,  and  Congress  would  not  be  called  upon  to  act.  They 
would  have  paid  off  the  debt  long  ago.  But  the  amount  estimated  to  be  paid 
for  freights  and  Government  service  was  not  paid  ; it  was  saved  and  better  service 
obtained  without  the  expenditure  of  money.  That  having  been  done  and  the 
Government  having  received  the  benefit  which  it  contracted  for,  that  was  to  have 
the  mails,  etc.,  carried  without  a further  expenditure  of  money,  having  got  that 
and  the  debt  still  remains,  why  not  allow  this  money  to  be  expended,  all  of  it, 
every  dollar  of  it,  in  such  works  of  internal  improvement  along  the  line  of  the 
roads  so  as  will  enable  the  people  to  build  up  that  country  ? These  roads  are 
loaded  down,  and  I predict  that,  if  you  pass  this  Union  Pacific  Railroad  bill, 
that  company  will  be  here  every  session  to  get  further  relief.  You  will  have  a 
difficult  time  in  collecting  it. 

You  may  ultimately  drive  that  road  into  insolvency  with  its  million  of  people 
tributary  to  it.  It  has  severe  competition.  Instead  of  loading  the  people  down 
in  this  way  givo  them  the  money  and  let  them  build  more  branches  ; let  them 
build  hydraulic  works  in  the  Rocky  Mountains. 

There  is  on  the  eastern  slope  of  the  Rocky  Mountains  an  arid  region  which  is 
an  empire  of  itself.  It  is  in  length  nearly  a thousand  miles  from  British  Columbia 
to  Mexico  and  in  width  about  300  miles.  Vast  streams  head  in  this  great  range 
of  mountains  with  flats  and  places  for  artificial  lakes.  We  hardly  know  what 
may  be  done  by  irrigation. 

The  works  of 

IRRIGATION  FOUR  THOUSAND  YEARS  AGO 

were  superior  to  any  works  constructed  in  modern  times  previous  to  English 
engineering  in  India  during  the  last  twenty-five  years.  We  read  of  Egypt  and 
its  vast  population,  and  we  wonder  at  the  prominent  place  it  occupied  in  the 
world  at  the  time  of  the  Pharoahs.  Recently  English  engineers  have  discovered 
a defile  leading  from  the  Nile,  whether  natural  or  artificial  they  can  not  tell,  but 
across  it  there  is  a dyke  constructed  of  masonry,  with  regulating  gates,  and 
they  describe  it  as  equal  to  if  not  surpassing  any  work  of  modern  times.  Be- 
low where  this  ends  there  is  a basin  of  250  square  miles  and  of  great  depth. 


17 


Evidences  all  around  this  basin  show  where  the  ancients  resided.  There  is  a vast 
country  below  this  basin,  which  was  once  irrigated  and  sustained  a large  popu- 
lation. The  English  propose  to  repair  this  work  and  utilize  this  basin,  and  re- 
claim a large  part  of  Egypt  which  has  been  a desert  for  thousands  of  years. 

This  Egyptian  work  is  pretty  authentically  ascertained  to  have  been  con- 
structed eighteen  hundred  years  before  the  commencement  of  the  Christian 
era.  By  references  to  it  by  Greek  writers  a^nd  other  evidences  its  age  is  pretty 
accurately  ascertained. 

In  the  little  island  of  Ceylon  we  have  authentic  history  of  works  of  irri- 
gation for  about  five  hundred  years  before  the  commencement  of  the  Chris- 
tian era,  and  for  nearly  fifteen  centuries  every  ruler  of  that  island  vied  with  his 
predecessor  and  tried  to  surpass  him  in  irrigating  works  and  in 

MAKING  LAKES  TO  SAVE  WATER, 

and  they  increased  the  population  so  that  it  rose  to  be  between  fifteen  and  twenty 
millions,  and  when  these  works  were  destroyed  by  invaders  the  people  died  and 
were  reduced  to  less  than  2,000,000  in  number,  which  has  been  increased  some- 
what since  the  British  rule,  and  is  now  about  two  and  a half  millions,  and  they 
are  largely  supplied  with  food  from  India. 

In  India  there  are  works  of  very  ancient  origin  which  show  the  highest  state 
of  engineering.  A large  portion  of  the  surface  of  India  is  covered  with  reservoirs 
and  artificial  lakes,  which  support  a vast  population.  In  Palestine,  Professor 
Marsh  tells  us,  that  at  every  step  you  see  ruins  of  hydraulic  works,  showing  it 
had  once  been  densely  populated. 

So  of  Persia,  parts  of  Southern  Europe,  Arizona,  Mexico,  and  South  America. 
More  than  half  the  people  of  the  world  have  always  subsisted  by  irrigation. 
Perhaps  more  than  two-thirds  of  the  people  now  living  pursue  that  practice. 

We  are  especially  benefited,  especially  blessed  here  with  an  area  larger  than 
any  other  on  the  globe  where  there  is  sufficient  rainfall  to  prosecute  farming  with- 
out the  necessity  for  irrigation.  Between  the  ninty-ninth  parallel  of  west  longi- 
tude and  the  Atlantic  Ocean  the  country  will  generally  produce  crops  without 
irrigation.  West  of  that  to  the  Pacific  Ocean  it  requires  irrigation.  There  is 
but  a narrow  strip  that  does  not  require  it,  the  northwest  corner  of  California 
and  those  portions  of  Oregon  and  the  Territory  of  Washington  that  lie  west  of  the 
Cascade  Mountains.  The  arid  region  has  an  area  of  more  than  1,200,000  square 
miles,  and  is  capable  of  sustaining,  on  any  reasonable  calculation,  a population 
of  200,000,000  people,  perhaps  more.  This  railroad  is  in  this  region,  and  it  has 
produced  vast  results.  The  people  on  their  own  account,  without  surveys  by 
the  Government,  adapted  to  it,  without  laws  making  it  convenient,  have  already 
irrigated  about  6,500,000  acres. 

Mr.  COCKRELL.  What  States? 

Mr.  STEWART.  In  the  United  States,  all  the  States  put  together.  I have  been 
examining  that  and  had  Professor  Powell  assist  me,  and  I find  there  is  an  area 
approximating  6,500,000  acres  under  irrigation  in  the  United  States. 

Mr.  GEORGE.  Is  the  soil  of  that  irrigated  area  good  ? 

Mr.  STEWART.  The  best  in  the  world.  The  country  seems  to  be  a barren 
desert,  utterly  worthless,  where  nothing  but  horned  toads  can  subsist.  Put 
water  upon  it  and  it  will  produce  beyond  anything  you  can  comprehend.  You 
have  only  seen  the  cultivation  by  rainfall. 


18 


Mr.  CHANDLER.  How  about  the  sage  brush  ? 

Mr.  STEWART.  Wherever  you  can  find  sage-brush  you  can  rely  upon  fertile 
land.  The  land  there  is  as  productive  as  any  other  land  in  the  United  States. 
It  is  not  leached  to  the  extent  that  other  land  is.  There  is  a combination  of  min- 
eral and  vegetable  matter  that  is  washed  down  upon  it  from  the  mountains,  and 
irrigation,  when  properly  conducted,  fertilizes  the  land.  The  water  from  the 
mountains  brings  down  what  is  called  silt  and  fertilizing  material,  which  is  just 
suited  to  produce  large  crops,  and  land  which  is  properly  irrigated  from  running 
streams  will  produce  crops  for  thousands  of  years  without  any  other  fertilizer. 
The  valley  of  the  Nile,  that  has  been  cultivated,  according  to  history,  more  than 
four  thousand  years,  is  as  rich  to-day  as  it  was  when  first  cultivated.  Irrigation 
renews  and  refreshes  it ; and  there  is  no  end  to  the  fertility  of  our  arid  lands  if 
they  can  be  properly  irrigated.  Irrigated  land  will  produce  such  enormous 
crops  and  so  continuously  that  I would  hardly  dare  tell  what  I have  seen,  be- 
cause I do  not  want  to  entirely  lose  my  reputation  for  veracity  on  this  floor. 

Now,  we  have  this  great  field.  It  is  barren,  and  it  is  the  common  fate  of  man 
to  be  at  war  with  the  desert.  The  desert  has  driven  him  back  and  he  has  sub- 
dued the  desert  in  turn,  and  the  whole  history  of  man  from  his  first  attempt  to 
cultivate  the  soil  has  been  a struggle  with  the  desert.  The  people  of  the  United 
States  have  not  until  now  been  brought  face  to  face  with  this  problem,  because, 
as  I said  before,  we  occupy  the  largest  area  of  land  suitable  for  cultivation  with- 
out irrigation  in  the  world.  There  is  no  other  section  on  this  habitable  globe 
equal  in  extent  to  the  land  in  the  United  States  which  can  be  cultivated  without 
irrigation  ; but  mankind  first  chose  the  deserts.  The  deserts  were  easier  to  cul- 
tivate, easier  to  subdue  than  the  forests.  The  region  from  the  Atlantic  to  the 
line  of  the  prairies  on  the  the  West— say  to  Indiana,  about  that  longitude— that 
region  all  through  the  Atlantic  and  in  the  South  which  is  heavily  timbered  was 
much  more  difficult  to  reclaim  than  this  desert,  as  we  call  it.  Those  timbered 
regions  required  a greater  expenditure  of  labor,  of  toil,  and  of  time,  and  are  a 
great  deal  more  difficult  to  reclaim  than  the  arid  regions. 

If  California  had  been  first  settled  the 

IMMIGRATION  WOULD  HAVE  SPREAD 

over  the  desert ; it  would  have  been  occupied  at  once,  and  the  Atlantic  coast 
would  have  been  untouched.  The  chance  we  have  for  the  settler  in  the  West 
is  better  if  we  can  appreciate  it  and  enable  him  to  appreciate  it.  It  is  as  great  a 
heritage  as  we  had  for  him  in  the  prairie,  for  40  acres  of  land  properly  irrigated 
anywhere  in  the  arid  region  will  support  a family  as  well  as  160  acres  in  a region 
cultivated  by  rainfall.  On  land  cultivated  by  rainfall  you  must  constantly  use 
fertilizers.  Fertilizers  do  not  hurt  any  land,  but  they  can  be  dispensed  with  to 
a greater  extent  where  you  irrigate. 

Now,  I want  Congress  to  take  this  subject  up  deliberately  and  see  whether  it 
is  proposed  to  collect  the  debt  from  my  State  when  nobody  ever  expected  that 
it  should  pay  it,  when  no  member  of  Congress  when  the  contract  was  made  ever 
expected  that  my  people  would  be  called  on  to  pay  this  debt.  The  only  provis- 
ion was,  as  I have  before  stated,  that  it  should  be  paid  in  freights  and  fares  in  the 
Government  service.  As  it  has  not  been  so  paid  I want  an  equitable  view  of  this 
question  to  be  taken.  The  amount  expended  is  small  compared  with  the  expend- 
itures of  Great  Britain.  It  will  not  be  necessary  to  make  large  expenditures  to 


19 


reclaim  our  arid  lands.  The  use  of  the  Pacific  Railroad  indebtedness  and  proper 
surveys  and  land  laws  will  go  far  towards  accomplishing  the  work  without  large 
appropriations,  because  our  people  understand 

THE  PRINCIPLE  OP  CO-OPERATION, 

and  they  can  do  a great  deal  if  they  have  the  proper  surveys  and  railroad  facilities 
in  that  country.  They  can,  as  a rule,  construct  these  works,  if  you  make  the 
law  so  that  it  is  possible  to  comply  with  it.  The  principle  of  co-operation  has 
been  developed  in  that  country  beyond  the  comprehension  of  ordinary  men.  I 
have  seen  the  Feather  River,  a river  larger  than  the  Potomac,  carried  in  a flume 
miles  in  length,  the  whole  work  having  been  done  by  young  men  associating 
themselves  together  without  a dollar  of  capital  but  what  they  dug  from  day  to 
day  out  of  the  gravel  and  the  sand.  The  water  would  not  be  low  enough  so  that 
it  could  be  carried  in  flumes  until  about  the  1st  of  July,  and  they  would  have  to 
stop  on  the  1st  of  October,  giving  only  three  months’  time  for  mining  the  bed  of 
the  stream,  the  water  of  which  was  carried  in  flumes  along  the  banks  and  over 
the  heads  of  the  miners  working  the  gravel  beneath. 

There  is  not  money  enough  in  the  Bank  of  England  or  in  the  Treasury  of  the 
United  States  to  hire  that  done  by  men  in  the  short  season  of  low  water. 

Nothing  but  vigorous  co-operation  of  young  men  with  a high  purpose  could 
accomplish  it.  If  you  let  me  take  you  over  that  region  I will  show  you  tunnels 
from  several  hundred  feet  to  several  miles  in  length  through  hard  rock,  which 
were  constructed  before  we  had  machinery,  giant  powder,  and  other  means  of 
rapid  construction  that  we  have  now,  but  they  were  constructed  by  the  hand- 
drill,  and  the  men  doing  it  simply  combined,  and  they  had  not  a dollar  of  capital 
when  they  began.  Part  of  them  would  work  at  that  and  part  of  them  would 
mine  somewhere  else,  and  thus  they  would  be  enabled  to  obtain  the  provisions 
and  tools  for  the  others,  and  they  would  go  on  for  years  and  accomplish  such 
works. 

I can  take  you  to  the  mountain  ridges  of  California  and  show  you  aqueducts 
and  canals  on  the  very  highest  peaks  in  order  to  furnish  water  to  the  mines. 
They  had  to  build  flumes  across  great  chasms  and  blast  into  the  side  of  the  moun- 
tains for  miles  and  miles  in  order  to  do  it.  Hundreds  of  miles  of  this  kind  of 
work  has  been  done  by  men  thus  co-operating  together.  They  understand  the 
principle  of  co-operation.  I will  go  into  the  interior  States  and  Territories  where 
mining  has  been  pursued,  and  I will  show  you  ho.w  these  people  understand  co- 
operation, and  if  you  show  them  20,000  acres  or  1,000  acres  of  good  land  tell  them, 
“ Under  proper  regulations  you  may  have  this  land  if  you  will  construct  these 
works  according  to  the  Government’s  survey,”  making  such  regulations  as  shall 
not  breed  monopolies,  providing  that  each  man  shall  have  his  home  under  proper 
regulations — that  is  the  question  to  be  studied — that  can  be  done.  Let  our 
American  people  be  allowed  to  co-operate  and  they  will  accomplish  more  in  de- 
veloping this  arid  region  than  all  that  has  been  or  can  be  done  with  British  cap- 
ital in  India.  But  while  I would  not  advocate  the  policy  of  expending  Govern- 
ment money  on  a large  scale  to  aid  irrigation,  still  the  mode  I have  suggested  of 
diverting  a part  of  the  indebtedness  of  these  roads  to  facilitate  the  work  would 
be  a great  boon,  and  not  only  benefit  the  people  and  the  Government,  but  would 
furnish  business  for  the  roads  and  enable  them  to  comply  with  their  obligations. 

The  people  of  the  East  can  hardly  credit  the  results  which  have  been  brought 


v 


about  in  conducting  great  enterprises  in  mining  and  other  enterprises  that  have 
been  conducted  by  co-operation.  Co-operation  is  a great  power  and  combined 
labor  is  capital.  All  the  fiked  capital  in  this  country  would  not  feed  the  people  a 
year.  The  wealth  is  in  labor,  in  the  productive  power  of  the  country.  Stop  the 
production  and  everybody  would  starve  at  once  ; but  what  the  productive  power 
of  co-operation  in  a country  like  that  will  make  possible  is  immense. 

Mr.  BLAIR.  I should  like  the  Senator’s  opinion  upon  a project  of  this  kind  : 
Suppose  that  the  Government  claim  should  be  discharged,  wholly  discharged, 
and  then  the  mileage  or  fares,  and  perhaps  freights,  also,  limited  accordingly  as 
in  the  case  of  the  limitation  of  charges  along  the  line  of  the  New  York  Central 
Railroad,  so  that  the  country  at  large  by  diminution  of  charges  would  get  the 
real  benefit  of  this  discharge  of  the  debt,  collecting  it  in  that  way,  by  a reduction 
of  the  expense  of  travel  and  transportation.  Has  that  project  ever  been  con- 
sidered ? 

Mr.  STEWART.  I am  considering  a kindred  project  to  that  right  now.  My 
instructions  propose  to  improve  these  roads  by  building  long  tunnels,  making 
double  tracks  where  necessary,  and  building  branches  with  this  debt  so  far  as  it 
goes,  and  to  supply  the  branches  with  business,  have  them  construct  hydraulic 
works,  to  use  this  money  for  that  purpose,  and  at  the  same  time  keep  them  free 
from  debt  and  pass  such  laws  as  will  insure  cheap  transportation.  I have  that 
idea  embodied  in  the  resolution  of  instructions  I offered.  Simply  releasing  the 
debt  would  not  accomplish  what  I want.  I do  not  want  the  debt  released.  I 
want  the  money  used  to  build  more  roads. 

Mr.  BLAIR.  That  is  to  say  you  would  continue  the  tax  on  the  transportation 
of  the  entire  country  for  the  development  of  that  locality? 

Mr.  STEWART.  No,  I would  not ; and  I will  tell  you  why  I would  not. 

Mr.  BLAIR.  I thought  that  was  the  Senator’s  suggestion. 

Mr.  STEWART.  The  improvement  of  the  main  line,  the  construction  of 
branch  lines  and  irrigation  works  would  enable  the  roads  to  furnish  cheap 
freights  and  fares,  and  Congress  should  retain  the  power  to  compel  them  to  do  so. 

Mr.  BLAIR.  May  I ask  the  Senator  a question  ? 

Mr.  STEWART.  Yes,  sir. 

Mr.  BLAIR.  I should  like  to  have  the  Senator  explain  why  it  is,  if  the  road  is 
relieved  of  debt  or  of  a portion  of  its  debt  of  sixty-five  or  seventy  million  dollars, 
it  will  not  be  able  to  do  the  business  that  passes  over  it  at  a lower  charge  than 
it  would  if  it  was  obliged  to  take  from  that  business  this  sixty-five  or  seventy 
million  dollars  to  pay  the  debt  ? 

Mr.  STEWART.  If  you  take  off  the  debt  and  trust  to  them  to  build  the  roads — 

Mr.  BLAIR.  I would  suggest  to  the  Senator  before  he  finds  fault  with  my  con- 
struction of  his  plan  that  he  understand  the  question  I asked.  My  question, 
which  I see  the  Senator  did  not  understand,  was  how,  in  his  judgment,  it  would 
operate  upon  the  interests  of  the  country  and  of  his  locality  to  discharge  the 
Government  debt  entirely — discharge  it  at  once,  discharge  it  absolutely,  and  then 
let  the  country  take  its  benefit  by  a legalized  reduction  of  fares  and  freights 
analogous  to  -what  prevails  in  the  case  of  the  New  York  Central  road? 

Mr.  STEWART.  I admire  the  Senator’s  liberality  in  discharging  the  debt  at 
once ; but  if  we  give  up  the  debt  what  assurance  have  we  that  the  branch  roads 
will  be  built  ? 


21 


Mr.  BLAIR.  Then  my  suggestion  was  correct,  that  the  Senator  wishes  the 
debt  to  continue  in  order  that  transportation  may  cost  as  much  as  or  more  than 
ever,  and  money  thus  raised,  instead  of  being  paid  by  the  country  at  large,  to 
be  used  in  the  still  further  development  of  that  locality. 

Mr.  STEWART.  The  transportation  will  cost  less,  of  course,  if  they  have 
branch  roads.  They  have  got  little  business  of  any  kind  along  there,  and  they 
are  compelled  to  charge  for  what  little  they  do  about  all  there  is  in  it  to  carry  it. 

Mr.  BLAIR.  Is  it  not  a fact  that  the  through  business  is  now  the  business 
very  largely  and  that  the  present  prices  for  fares  and  freights  are  paid  by  the 
people  of  the  central  and  eastern  portions  of  the  country  ? 

Mr.  STEWART.  The  through  business  amounts  to  very  little  comparatively. 
It  is  the  local  business  on  which  they  must  depend. 

Mr.  BLAIR.  If  there  is  no  through  business  across  these  trans-continental 
routes,  for  what  purpose  were  they  constructed  and  for  what  use  are  they  now  ? 
I did  not  fail  to  understand  that  the  Senator  dwelt  upon  the  great  and  patri- 
otic purpose  for  which  this  line  was  originally  constructed.  I have  always  un- 
derstood that  to  be  the  cause  of  the  nation’s  contracting  this  high  debt  or  giving 
this  system  assistance.  But  the  debt  remains  and  the  nation  is  undertaking 

Mr.  STEWART.  Let  me  ask  the  Senator  a question  now  that  he  has  asked  me 
so  many. 

Mr.  BLAIR.  Will  the  Senator  hear  what  I say  in  reference  to  the  suggestions  ? 

Mr.  STEWART.  All  right. 

Mr.  BLAIR.  I want  him  to  understand  me:  I will  say  to  him  that  I under- 
stand the  reason  why  the  Government  became  interested  pecuniarily  was  to  keep 
the  country  together,  to  keep  it  united,  and  that  purpose  has  been  attained,  and 
that  the  public  did  not  generally  expect  to  collect  this  debt  originally.  It  re- 
mains, and  now  the  public  having  obtained  its  first  grand  purpose  insists  upon 
its  money  also.  That  money  must  be  collected  out  of  the  fares  and  freights  of 
the  roads,  so  that  it  is  a burden  upon  those  who  pay  the  fares  and  freights. 
Now,  I understand  that  about  one-half  of  this  debt  the  payment  of  which  the 
Government  guarantied  and  which  has  got  to  be  paid  to  private  individuals  or 
corporations  any  way,  and  beyond  that  is  an  additional  debt  of  perhaps  the  same 
amount  more  which  is  due  direct  to  the  Government. 

Now,  I make  this  suggestion,  and  ask  the  Senator’s  view  of  it : whether  for  the 
general  good  of  the  road  and  of  the  country  it  would  or  would  not  be  a good 
measure  to  discharge  all  that  is  owed  to  the  Government  directly,  leaving  only 
that  which  is  due  on  the  first  original  primary  mortgage,  which  must  be  paid, 
and  the  payment  of  interest  on  the  Government  mortgage,  as  I understand,  so 
theft  it  must  be  paid  anyway,  but  which  is  charged  upon  the  Government  di- 
rectly, and  then  make  a corresponding  and  unequalized  reduction  of  fares  and 
freights  so  that  the  whole  country  or  whoever  pays  a passage  over  the  road  will 
have  the  benefit  of  it  ? That  was  the  suggestion  I made. 

Mr.  STEWART.  I ask  the  Senator  if  he  is  in  favor  of  that  ? 

Mr.  BLAIR.  I have  not  thought  very  much  about  that.  I asked  the  Senator 
the  question.  But  I am  inclined  to  think  I would  be  in  favor  of  that ; but  in 
my  belief  there  are  others  who  understand  that  great  subject  better  than  I do, 
and  as  a result  of  my  belief  I was  questioning  the  Senator  himself,  thinking  he 
was  one  of  those  who  knew  more  about  it  than  I do. 


Mr.  STEWART.  It  undoubtedly  would  be  better  to  discharge  the  debt  at 
once  on  condition  of  reduction  of  fares  and  freights  than  to  enforce  its  payment 
and  thereby  impoverish  tlie  country  through  which  the  road  passes,  but  my 
opinion  is  that  it  would  be  better  to  use  the  debt  for  the  improvement  of  the 
road,  the  construction  of  branch  roads  and  irrigation  works,  and  also  to  require 
cheaper  fares  and  freights. 

As  I before  remarked,  Great  Britain  started  first  to  build  railroads,  and  built 
them  all  through  India.  They  found  that  the  roads  without  irrigation  were  use- 
less, and  they  then  deviseda  scheme  to  irrigate  the  land  so  as  to  supply  business 
for  their  railroads.  They  first  estimated  one  hundred  and  fifteen  millions  for 
irrigation.  Much  more  than  that  has  already  been  expended,  and  the  result  has 
been  entirely  satisfactory. 

In  the  railroads  and  in  the  works  of  irrigation  they  constructed  they  spent  a 
thousand  millions  in  round  numbers,  and  they  increased  very  much  the  revenues 
of  India.  I do  not  propose  appropriations  by  this  Government  on  any  such 
scale,  but  I claim  that  it  is  wrong  to  tax  a portion  of  the  arid  region  to  pay  for 
a great  national  enterprise,  in  which  the  whole  country  is  interested,  and  op- 
press the  people  and  prevent  its  development.  But  inasmuch  as  the  Government 
has  received  its  consideration  I say  use  every  dollar  of  this  money  for  public  im- 
provements in  that  country  under  such  regulations  as  Congress  may  hereafter 
prescribe.  In  that  way  we  shall  have  carried  out  the  original  design  of  the  act 
and  at  the  same  time  develop  the  interior  of  the  country,  and  the  resulting  ben- 
efit to  the  United  States  will  be  immense. 

About  300  miles  of  the  Central  Pacific  Railroad  is  in 

THE  VALLEY  OF  THE  HUMBOLDT, 

in  Nevada.  This  valley,  before  any  portion  of  it  was  irrigated,  was  the  most 
forbidding  in  appearance  of  any  section  of  the  overland  line.  A small  part  of  it 
has  been  irrigated  and  it  has  proven  to  be  equal  in  fertility  to  any  land  in  the 
United  States.  There  is  sufficient  water  running  to  waste  in  the  Humboldt  River 
and  its  branches  to  irrigate  this  entire  valley.  If  this  water  were  stored  and 
conducted  over  the  land  by  proper  hydraulic  works  during  the  irrigating  season  at 
least  4,000,000  acres  of  land  could  be  reclaimed  in  this  valley  alone.  The  irrigated 
land  would  be  worth  at  least  $50  an  acre  and  would  support  a population  of 
more  than  300,000.  The  entire  farm  area  of  Massachusetts,  according  to  the 
Tenth  Census,  is  not  equal  in  extent  to  the  land  susceptible  of  irrigation  in  the 
Humboldt  Valley  alone. 

A few  millions  of 

THE  DEBT  OP  THE  CENTRAL  PACIFIC, 

if  used  in  works  of  irrigation  for  this  valley,  would  create  wealth  and  support  a 
population  sufficient  to  contribute  annually  to  the  revenues  of  the  United  States 
more  money  than  could  be  collected  from  the  company  by  any  funding  bill  that 
could  be  devised.  The  Central  Pacific  Railroad,  as  before  stated,  occupies  this 
valley.  There  is  no  inducement  for  a parallel  road ; and  in  many  places  the 
road  occupies  the  sites  which  will  ultimately  have  to  be  used  for  reservoirs,  etc., 
and  the  road-bed  must  be  changed  before  the  valley  can  be  reclaimed.  If  the 
Government  insists  upon  the  payment  of  the  debt  without  any  portion  of  it  be- 
ing expended  for  the  development  of  the  country  or  the  improvement  of  the  road 
the  road  will  remain  where  it  is,  and  the  greater  portion  of  this  valley  will  also 


23 


remain  a desert.  Congress  can  remedy  all  this  by  requiring  the  company  to 
change  its  road-bed  and  expend  a portion  of  the  money  due  the  Government  for 
that  purpose,  and  also  for  the  construction  of  the  necessary  hydraulic  works. 
The  Central  Pacific  Railroad  also  passes  through  the  valley  of  the  Truckee 
River,  the  outlet  of  Tahoe,  Donner,  and  other  lakes.  Here  again  is  a vast  area 
of  several  hundred  thousand  acres  of  land  that  can  be  easily  reclaimed  by  storing 
the  flood-water  in  the  mountain  lakes  and  distributing  it  by  canals  on  the  fertile 
lauds  below. 

Nevada  has  numerous  other 

FERTILE  VALLEYS  SUSCEPTIBLE  OF  IRRIGATION 

which  will  supply  business  for  this  road  and  branches  to  be  constructed  from  it. 
If  the  policy  I indicate  could  be  pursued  Nevada  in  a very  few  years  would  be  a 
wealthy  and  populous  State,  and  the  revenues  she  would  pay  to  the  Government 
would  far  exceed  the  amount  of  money  that  can  be  collected  by  the  proposed 
funding  of  the  debts  of  all  the  aided  roads  combined.  To  make  this  central  con- 
tinental road  capable  of  doing  the  business  of  the  country  cheaply  and  expedi- 
tiously tunnels  are  necessary  to  be  constructed  to  avoid  the  heavy  grades  and 
deep-snow  line  in  the  Sierra  Nevada  Mountains,  where  over  30  miles  of  snow- 
sheds  are  now  maintained.  These  tunnels  have  been  surveyed,  and  in  the  aggre- 
gate will  be  several  miles  in  length.  It  is  entirely  practicable  to  enter  the  moun- 
tains below  the  deep-snow  line  on  the  east  side  and  avoid  the  deep  snow  on  the 
west  side  of  the  summit  of  the  mountains  by  following  along  the  sunny  slope 
which  forms  the  northern  bank  of  the  North  Fork  of  the  American  River. 

By  these  tunnels  about  1,100  feet  of  altitude  would  be  avoided,  the  snow-sheds 
dispensed  with,  the  cost  of  operating  the  road  greatly  reduced,  much  time  saved, 
and  travel  made  more  comfortable  and  safe.  A portion  of  the  debt  ought  cer- 
tainly to  be  used  for  this  much-needed  improvement,  and  unless  this  is  done 
these  tunnels  will  never  be  constructed  and  the  interior  will  be  deprived  of  cheap 
freights,  travel  and  mails  delayed,  and  Government  transportation,  particularly 
in  time  of  war,  greatly  embarrassed.  Before  any  bill  is  passed  adjusting  or 
funding 

THE  DEBTS  OF  THESE  ROADS 

it  seems  to  me  that  the  committee  charged  with  that  subject  should  make  a per- 
sonal examination  of  the  country  through  which  the  roads  pass  to  enable  them 
to  devise  some  scheme  whereby  these  roads  may  be  a benefit  to  the  country  and 
not  an  insuperable  obstacle  to  its  development. 


ADDENDA. 

The  Union  Pacific  Funding  bill  was  subsequently  recommitted  to  the  commit- 
tee, and  the  Senate  adopted  the  following  resolution  introduced  by  Mr.  Stewart : 

That  the  select  committee  appointed  under  the  resolution  of  the  Senate  of 
January  24,  1888,  to  which  was  referred  the  President’s  message,  transmitting 
the  report  of  the  Pacific  Railway  Commission,  be,  and  it  is  hereby,  continued, 
with  all  the  power  and  authority  on  it  conferred  by  Senate  resolution  of  Febru- 
ary 23,  1888,  until  the  indebtedness  of  the  Union  Pacific  Railroad  Company, 
the  Kansas  Pacific  Railway  Company,  the  Central  Branch  Union  Pacific  Rail- 
road Company,  and  the  Central  Pacific  Railroad  Company  as  the  successor  to  the 
Central  Pacific  Railroad  Company  of  California,  and  the  Western  Pacific  Rail- 


24 


road  Company,  to  which  the  subsidy  bonds  of  the  United  States  were  advanced 
in  aid  of  the  construction  of  the  roads  of  said  companies,  shall  be  adjusted  by 
Congress.  And  said  committee  is  hereby  instructed  to  personally  examine,  dur- 
ing any  recess  of  Congress  preceding  the  meeting  thereof  in  December  next,  the 
roads  of  said  companies  and  the  country  through  which  they  pass  or  which  is 
immediately  contributory  to  their  income,  for  the  purpose  of  ascertaining  the 
ability  of  said  companies  to  pay  their  indebtedness  to  the  Government,  and  how 
the  indebtedness  of  said  companies  can  be  so  adjusted  and  paid  as  to  advance 
the  development  of  the  country  through  which  said  roads  pass,  and  afford  to 
the  inhabitants  thereof  reasonable  rates  of  transportation  for  passengers  and 
freight.  Said  committee  may  hold  its  sessions  at  any  place  in  the  United  States, 
and  the  expenses  attending  its  investigation  shall  be  paid  out  of  the  contingent 
fund  of  the  Senate. 

Any  subcommittee  appointed  by  said  committee  shall  have  all  the  powers  of 
the  full  committee. 


